This is a 32bit app, it's just running out of virtual memory, not physical.
It is apparently also happening with intel graphics drivers (for instance discussed here: https://github.com/ValveSoftware/Source-1-Games/issues/2212), and macs may be affected too.
So this looks more like a game issue to me, albeit it might be possible the driver also "wastes" virtual memory (vram/gtt mappings?). (I have no idea if this is something which could be reasonably expected to be improved.)